I have finally found a deal that is cash flow positive. FINALLY. The only bad thing seems to be is that its Strata titled. So far the research I have been doing tells me that this is a bad thing. Then I was going through a case study from Steve and Dave (the Ringwood units) and I saw that those units were also strata titled. Is strata title really that bad? If so is it because of the risk of a bad manager or that the building could be a dud? I would assume that a building inspection would tell me if the building is structurally sound or if it needed heaps of work.
Any advice or help would be very much appreciated as this would actually be my first investment deal if I go through with it.Thanking you all in advance
SanelaSanela Radoievici
Hi Sanela,
Having a body corporate (& strata management company) in the mix can add an extra dimension to your investment. This doesn’t necessarily mean it is a bad thing – it is just an extra party to deal with.
On occasions there can be a conflict of interest. Certainly if you are the type to sit back and not involve yourself with your investment and let others, with vested interests, run the show then you can experience some issues from time to time. However if you do get yourself involved on the management committee and are actively involved with your investment then there is a reduced likelihood of problems occuring down the track.
I guess an easier way to look at it is – you have good and bad tenants and each can be managed in their own way. Equally you can have good andbad strata groups – each can be managed in their own way.
A word of advice – when doing searches prior to settlement ensure that you do a strata search to ensure all body corporate fees have been paid for by the owner.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
Skype – derekjones2113Apparently there are consultants/lawyers who can do a search of the body corporate’s minutes of meetings etc to see if they are being sued or they have decided to hit each owner $20k to render the building etc etc.
safe as
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